Why Home will Prices go up after RERA?
Jun 28, 2017 Real Estate News
Since 1st May 2017, real estate’s most awaited law came into full force across the country. RERA has been welcomed by both the builders and the buyers with open arms. RERA seeks to make the real estate industry more transparent and seamless for the buyers. In the past, there have been lots of issues where the interests of the buyers have been exploited by the developers. RERA aims to put an end to all the unscrupulous practices of the developers and help the buyer to get a proper deal.
There are few reasons why the prices of the properties will go higher post RERA:
1. The supply and demand:
RERA will redesign the economic framework of the supply and demand. Since the developers are supposed to complete the project in the promised time frame to escape the penalty otherwise, the developers will ask for the limited supply of the raw material which will help to complete the project in the time frame. This will increase the cost of the raw materials.
The demand will also see a rise. The potential buyers of the middle income and lower income group will look forward to investing in the affordable housing projects. The investors will wait and look at the prices before investing. The demand and supply redistribution will lead to the rise in the prices of the properties.
2. Developers cost:
Since the developers cannot launch any project unless it has got all the approvals from the government, the cost of the property will surge. This additional holding cost will be passed onto the buyers. Initially, the developers used to launch the projects before they received all the approvals and gave the buyer's pre launch offers. Since these won’t be an option anymore, expect the prices to rise.
3. Land prices:
Post demonetization, there won’t be much cash input for the transaction for the properties. The further stricter rules of RERA will force the developers to buy the land legally and get all the approvals. This will increase the overall cost and will raise the prices of the properties.
On the brighter side, the banks are now offering lower home loan rates for the buyers. This will further boost the demand among the buyers. Experts are expecting a price rise in the cost of the properties post RERA yet a seamless and transparent buying and selling of properties.
There are few reasons why the prices of the properties will go higher post RERA:
1. The supply and demand:
RERA will redesign the economic framework of the supply and demand. Since the developers are supposed to complete the project in the promised time frame to escape the penalty otherwise, the developers will ask for the limited supply of the raw material which will help to complete the project in the time frame. This will increase the cost of the raw materials.
The demand will also see a rise. The potential buyers of the middle income and lower income group will look forward to investing in the affordable housing projects. The investors will wait and look at the prices before investing. The demand and supply redistribution will lead to the rise in the prices of the properties.
2. Developers cost:
Since the developers cannot launch any project unless it has got all the approvals from the government, the cost of the property will surge. This additional holding cost will be passed onto the buyers. Initially, the developers used to launch the projects before they received all the approvals and gave the buyer's pre launch offers. Since these won’t be an option anymore, expect the prices to rise.
3. Land prices:
Post demonetization, there won’t be much cash input for the transaction for the properties. The further stricter rules of RERA will force the developers to buy the land legally and get all the approvals. This will increase the overall cost and will raise the prices of the properties.
On the brighter side, the banks are now offering lower home loan rates for the buyers. This will further boost the demand among the buyers. Experts are expecting a price rise in the cost of the properties post RERA yet a seamless and transparent buying and selling of properties.
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